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HBO Now passes two million US subscribers

HBO has passed more than two million domestic subscribers for its over-the-top service HBO Now, parent company Time Warner revealed.

Time Warner CEO Jeff Bewkes announced the figure during the company’s fourth quarter earnings call, saying he was pleased with HBO’s US over-the-top growth.

“HBO is just as focused on reaching consumers abroad, with over-the-top lunches in Spain, Brazil and Argentina in 2016,” he said.

The 2 million figure marks strong US uptake for HBO Now in the past year. During the firm’s Q4 2015 earnings call last February, the firm reported that the service had 800,000 paying subscribers with “enormous opportunity ahead”.

Asked how important HBO Now’s distribution deal with Amazon has been to its overall growth, HBO CEO Richard Plepler said on yesterday’s call that Amazon has been “a terrific new partner,” though he added that new deals are also due to follow.

“There will be other digital partners that you will see announced in the coming weeks and months. That’s why we’re so optimistic not only about our traditional business, but about our OTT business as well.”

Last year HBO launched its OTT service on Microsoft’s Xbox platforms, new Samsung smart TVs, Sony’s PlayStation platforms and on Amazon Prime.

On the question of customer drop-off, Plepler said that in the last few months the company had seen its lowest churn since “the beginning of introducing HBO Now and our OTT product”.

He attributed this to the quality and range of content on HBO, as well as the fact that as its subscriber-base ages it is less likely churn.

“I think it’s important to remember when you look at the usage on digital platforms and on-demand you see the usage going across a wide range of categories. It’s not just Westworld and Game of Thrones and The Night Of – it’s comedies, it’s late night, it’s documentaries,” said Plepler.

Responding to a question about what impact ‘virtual MVPDs’ might have on the pay TV ecosystem, Bewkes said that new entrants like Hulu and Amazon are a “very healthy development”.

“I think, it’s safe to say that what they’re going to help do is invigorate consumer interest everywhere in watching networks on demand, watching them on-the-go in mobile devices, and a whole range of offerings, which is what I think we’d all like to see,” said Bewkes.

However, he added: “I think it’s too early to say, if you’re asking for timing, what the relative size of the virtual MVPD sub growth is, let’s say, in 2017 versus what the continued slope of the at-home ecosystem sub count turns out to be.”

Overall, Time Warner reported an 11.5% year-on-year increase in Q4 revenues to US$7.89 billion, while total operating income came to US$1.69 billion.

HBO’s Q4 revenues increased 6% to US$1.5 billion thanks to a 5% increase in subscription revenues and a 7% rise in content and other revenues. Operating income at HBO increased 9% to $429 million.

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